Investors Optimistic About LUNA Rebirth As Price Surges Over 480%

Investors are optimistic that Luna Classic (LUNC), the native token of the Terra blockchain that spectacularly imploded in May, will return from the dead as its price rally shows an over 480% surge after a long time.

The price started pumping on Sept. 8, with the token trading at $0.0005856, which was a 489% increase from its $0.00009941 price on Aug. 8. The day after, a lot of things happened in the Terra ecosystem.

The Luna Classic saw the passing of a governance proposal on Sept. 9, adding a 1.2% tax on all on-chain transactions. This means the proposal permanently removes 1.2% of the LUNC supply from every on-chain transaction.

Based on the proposal, the tax will be sent automatically to a wallet to burn or destroy the token and remove it from the circulating supply. The fee is anticipated to take effect on Sept. 20.

The 1.2% tax is expected to significantly reduce the supply of the classic token, which saw a virtually zero price when the blockchain crashed in May. "Proposal 3568 was first introduced on [June 30] and this has corresponded to a roughly 4x increase in LUNC price as the proposal got closer to implementation," Bobby Ong, the co-founder and chief operating officer of CoinGecko, said.

Aside from that, the pump is also credited to the passing of the governance proposal on conducting a second airdrop of more than 19 million LUNA tokens that will run until Oct. 4. It is worth noting that following the launch of the new version of the token dubbed Terra Luna or Luna 2.0, the LUNC ecosystem has been run by community holders and they have been working hard voting on and creating changes in the ecosystem.

As to whether Luna Classic could sustain its uptrend is still unknown. However, many market analysts think the price rally could be short-lived. "This is a total speculation play and basically turns LUNC into a meme coin at this point," Prosper Trading Academy crypto educator Howard Greenberg said.

"It will be a very volatile trade, and if someone chooses to enter the trade I would make sure you have an exit plan for both downside and upside," he added.

As of 4 a.m. ET on Monday, LUNC was trading down 9.71% at $0.0004036 with a 24-hour volume of $863,667,376, according to the latest data from CoinMarketCap.